Solyndra CFO won't say if solar maker to stay in US

* CFO won't say if company in talks with U.S. buyers

* Govt attorney said should have gone bankrupt long ago

* Govt objects to company's request to use cash collateral

By Tom Hals

WILMINGTON, Del., Sept 7 (Reuters) - The chief financial
officer of bankrupt start-up Solyndra, which had ramped up its
operations after getting a U.S. government loan for solar
companies, declined to say on Wednesday if potential buyers
would keep its business in the United States.

Under questioning at a bankruptcy court hearing from a U.S.
government attorney, CFO W.G. Stover declined to identify
either of the two companies that have shown an interest in
Solyndra's operations, or even where they were based.

Asked if the potential buyers might move Solyndra's unique
solar cylinder business overseas, Stover would only say doing
so would increase the cost to a potential buyer.

Matthew Troy, an attorney for the Department of Justice,
said the government's $535 million loan required the business
be operated in the United States.

The U.S. solar industry has been hit by plummeting prices
for panels as European governments cut subsidies, hitting
global demand, at the same time that Beijing-backed Chinese
manufacturers step up production.

Solyndra filed for bankruptcy on Tuesday, becoming the
third U.S. solar company to collapse in recent weeks. The
company opened a manufacturing plant with a loan extended by
the U.S. Federal Financing Bank and guaranteed by the
Department of Energy. President Barack Obama visited Solyndra's
Fremont, California, plant last year.

The government's loan is third in line for repayment behind
a proposed $4 million bankruptcy loan and a $69.3 million
first-lien loan. Those two loans were extended in part by
Argonaut Ventures LLC, a venture capital firm in San
Francisco.

Solyndra's attorney, Maxim Litvak, of Pachulski Stang Ziehl
& Jones LLP, declined to say if the company had enough value to
repay the government loan.

The company has secured debts of $783.8 million, according
to court documents filed with its bankruptcy on Tuesday.

The U.S. government objected to requests by the company to
use lenders' cash collateral to give Solyndra four weeks to
find a commitment from a buyer.

"It's clear this company should have filed for bankruptcy a
long time ago and didn't," Troy said. He also questioned why
Solyndra still needed 113 employees after laying off about
1,000 people last week.

Stover said a potential buyer was sending a contingent to
its California headquarters next week for talks, but that no
detailed terms had been discussed.

The case is Solyndra LLC, Case No. 11-12799, U.S.
Bankruptcy Court, District of Delaware.
(Reporting by Tom Hals, editing by Dave Zimmerman)